Kohl's shares briefly double, as meme stock mania makes a comeback
Why it matters: It may mark the return of meme stock mania —but also another potential sign that this market rally may be getting out of hand.
By the numbers: Kohl's shares closed at $10.42 Monday and peaked at $21.39 at the open Tuesday. They were still up more than 30% at mid-morning.
The rally comes as Kohl's is facing significant short interest, meaning investors have been betting against the success of the company.
49% of the stock's float is sold short, which means nearly half of the shares in the company that are available for trading are being bet against.
Trading was halted due to volatility.
What they're saying:"Meme stocks are back," Jay Woods, chief global strategist at Freedom Capital Markets, tells Axios — especially given that there's no apparent reason for the stock price to have surged this much.
On a fundamental basis, the retailer has struggled to increase profits, closing stores and cutting staff amid a broader department store downtrend.
The majority of Wall Street analysts have hold or sell ratings on the stock.
Catch up quick: Today it's Kohl's. Yesterday, it was OpenDoor.
OpenDoor Technologies, a real estate tech startup, saw its shares up by over 70% on Monday thanks to what appears to be retail demand.
The stock is now up over 180% over the last 5 days.
Be smart: Meme stock investing activity hasn't rebounded to its peak 2021 levels.
That's when stimulus checks, combined with time at home to trade and monitor Reddit threads, led to a boom in retail trading activity.
Since then, retail sentiment has gained more legitimacy, particularly following the April tariff-driven volatility, which saw hedge funds flee the market and retail traders stay invested.
The bottom line: The recent market rally could be fueling a return to riskier trading activity, including potential short squeezes like the one Kohl's may be experiencing.
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